What Are Medicare Supplement Plans?

The Medicare health insurance program provides coverage for various medical services. However, Medicare can often be confusing for many people as there are different parts and plans to know, including supplemental coverage.

Understanding your options for supplemental insurance with Medicare is especially important as it will help you make the right decision for your healthcare needs. So, what are Medicare Supplement plans?

The Structure of Medicare

There are four different parts to the Medicare program: Part A, B, C, and D. Medicare Part A and Part B act as the base of your Medicare coverage. Part A helps cover your inpatient needs, typically including room and board costs. Part B covers your outpatient medical services, such as lab work, surgeries, doctor’s visits, preventative care, and more. Both parts are important, and you definitely don’t want to sign up for Part B late. You can learn more about this mistake at boomerbenefits.com/you-shouldnt-wait-to-sign-up-for-medicare-part-b-heres-why.

Now, one thing to know about Part B is that it only covers 80% of your Medicare-approved services. The remaining 20% is left for you to pay. Depending on the services you receive, 20% can be a lot to handle.

About Medicare Supplement Plans

Fortunately, there are other plans you can sign up for to help cover this 20% called Medicare Supplement plans. Medicare Supplement plans, also known as Medigap plans, help cover your cost-sharing with Medicare, the 20%, after Medicare pays its portion. The 20% includes deductibles, copayments, and coinsurance.

Medigap plans are secondary to Medicare, meaning Medicare pays first for approved services, and your Medigap plan pays second. If Medicare does not pay for a service, neither will your Medigap plan.

Additionally, with a Medigap plan, you can see any provider in the United States as long as they accept Medicare insurance. So, these plans are very flexible and can be a good choice for many people. However, Medigap plans do not cover retail prescription medications. You would need to sign up for a standalone Part D plan for that.

Medicare Supplement Plan Options

Ten different Medigap plans are available and sold by private insurance companies, including Plan A, B, C, D, F, G, K, L, M, and N. Each Medigap plan offers different levels of coverage. For example, Plan G covers the Part A deductible at 100%, but Plan L only covers the Part A deductible at 75%.

The good thing about Medigap plans is that they are standardized, meaning each will have the same benefits no matter which insurance carrier you purchase the plan through. For instance, a Plan N with UnitedHealthcare offers the same benefits as a Plan N with Humana.

How Much Do Medicare Supplement Plans Cost?

Each Medigap plan has a monthly premium, but they do not have a set price. All Medigap plans have a different monthly premium based on various factors, including zip code, gender, age, tobacco use, and more. Even if two people have a Plan K, for example, their monthly premiums will look different.

Medigap plans usually have a rate increase each year as well. You cannot predict a Medigap plan’s exact rate increase, but you can refer to an insurance carrier’s rate increase history to help you get a better idea of what to expect.

Choosing a Medicare Supplement Plan

Now, how do you know which Medigap plan to choose? Your decision ultimately comes down to personal factors like your budget and health status. To help you get started, consider looking at the more popular Supplement plans.

The top three plans among Medicare beneficiaries are Plan F, G, and N. Out of the three, Plan F offers the most comprehensive coverage as it covers all your 20% in exchange for a higher monthly premium. However, Plan F is only available to people eligible for Medicare before January 1st, 2020.

Fortunately, Plan G and Plan N are still good options too. The only expense that Plans G doesn’t cover is the annual Part B deductible. Once you meet the Part B deductible, you will have no out-of-pocket costs for Medicare-approved services.

Plan N is almost identical to Plan G. The only difference between the two is that, unlike Plan G, Plan N does not cover Part B excess charges, and there can be extra copays for doctor’s and emergency room visits.

Summary

Medicare Part B covers 80% of your Medicare-approved outpatient medical services, while the remaining 20% is left to you. However, Medicare Supplement (Medigap) plans help cover some or all of this 20%, depending on the plan you choose.

Each plan is standardized, so you should consider monthly premiums and rate increase history to help decide which plan may be best for you. The top three Medigap plans are Plan F, G, and N, so these plans can be a good place to start your research.

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